Palm oil gains from bargain-buying, and crude oil is on the rise
Malaysian palm oil futures rose Wednesday on the back of bargain-buying after two sessions in which they had lost money and a recovery in crude oil. By midday, the benchmark 'palm oil contract on the Bursa?Derivatives?Exchange for?October deliveries had gained 25 ringgit (0.54%) to 4,667 Ringgit ($1,141.91). The previous two sessions saw a loss of 1.67%.
Anilkumar bagani, commodity research director at Sunvin Group, says that crude palm oil futures have traded higher due to bargain-buying, a rebound in the energy price and some good palm oil "physical coverage" from India.
He said that the optimistic increase in Malaysian palm oil exports has cushioned prices. Cargo surveyors estimated that the exports of Malaysian products containing palm oil for July 1-25 increased between 8.1% to 15.9% compared to a month ago.
Bagani said that the gains were capped by the higher?production estimates and the absence from Indonesia of the?B50 Biodiesel allotments. After the joint attacks by the United States, Saudi Arabia and Iraq on Iraq, oil prices increased more than $3 per barrel.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Dalian's soyoil contract with the highest volume fell by 0.11% while palm oil contracts increased by 0.49%. Prices of soyoil on the Chicago Board of Trade rose 0.06%.
Palm oil follows the price movement of competing edible oils as it competes to gain a share in?the global market for vegetable oils.
The ringgit (palm's currency) strengthened by 0.12% against the dollar. This made the commodity a little more expensive for foreign buyers. The European Union's soybean imports, which began in July, had fallen 39% compared to the same period last year. Palm oil imports also fell 39%, reaching 0.13 million tons. Technical analyst Wang Tao stated that palm oil could test resistance at 4,674 ringgits per metric tonne. A break above this level would lead to gains in the range of 4,696-4717 ringgits.
(source: Reuters)
